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Ericsson starts watermarking journey with Kudelski’s NexGuard

This week Ericsson, in the run up to IBC, signed a partnership deal with Kudelski’s NexGuard to launch Network ID, a forensic watermarking product for the broadcast industry. It seems a small enough announcement, but for a business which is trying to not spend any money, this is about letting someone else own a key technology, because it is cheaper.

In the past Ericsson would have either acquired a business or built a forensic watermarking system itself. But by signing a deal with NexGuard, a sister company to Nagra, Ericsson is almost committing its entire Media division to go down the same route. You don’t want to buy a box which downloads contribution feeds and converts them from say MPEG2 to HEVC or something similar, in the process putting in a watermark, and then provide encoders which work with an entirely different watermarking system.

This might be a single integration deal to secure one customer, in which case it may just as easily do another integration deal with Verimatrix or ContentArmor, the two other major businesses in this segment, at a later stage, to support a different customer.

Ericsson right now is trying to make as few changes to its media offerings as it can, because they are up for sale, but it may end up owning them for quite a while longer – quite simply because it thinks its assets are worth $1 billion and outside observers think they are worth about half that.

Ericsson’s media assets include Media First acquired from Microsoft as Mediaroom, Tandberg TV which it bought for $1.4 billion as far back as 2007,
Red Bee Media, a metadata spin out from the UK market, Technicolor Broadcast, Azuki, a 40 man US OTT start up, Envivio the US software encoding firm and maybe other assets such as Telcordia and its CDN business.

But meanwhile these become wasting assets, progressively becoming worth less and less, if the product lines are allowed to get out of date. Recently Ericsson committed to Media First IPTV middleware talking to Android set tops – another move that it will have done for next to nothing, and now it has upgraded at least the ability of broadcasters to dynamically insert watermarks into contribution feeds in real time, something that broadcasters have been encouraged to add by MovieLabs to support its now famous UHD specifications.  RFPs are likely to insist on this feature right now, so the cheapest way to put it in place is to go to the largest Watermarking business and offer it a way into your heartlands by completing an integration.

That risks letting Nagra in side by side among clients which have bought Ericsson multiscreen systems, but which just as easily could use Nagra’s Open TV Suite, a prospect that must have the account managers at Nagra salivating.

The new product they are creating jointly is called NexGuard’s Network ID and it inserts an invisible and robust forensic watermark in primary distribution feeds for linear TV, be it satellite or fiber. It is merely the start of the chain of distributing content for TV, and further differentiated watermarks will need to be inserted further down the Ericsson architecture, all the way to those Android set tops that it just agreed to let into its eco-system.

Watermarking is designed to provide clear evidence of the distribution path of illegally distributed content copies and this may well be specifically aimed at live sports broadcasts, as it hints at that in the announcement. Once the content is found in the wild, Nagra can help find the source of the leak and immediately shut it off.

It also serves as proof of ownership to issue take down notices of pirated streams for instance from social media or live streaming apps like Periscope, to get those taken down too.

The system will be integrated into an existing Ericsson product the RX8200 Advanced Modular Receiver (integrated receiver decoder) for satellite distribution. To us this seems to be the device which takes a TV channel from a satellite ready to push into an IPTV or cable or DTH feed, and it will watermark each distributor with a different mark. Ericsson says it is the world’s bestselling IRD and it must have come from the Technicolor Broadcast acquisition. It has subsequently been upgraded to DVB-S2X and now supports HEVC.

Maurice van Riek, Kudelski Group SVP Content and Asset Security, said: “Tracing illicit content activity is a necessary and critical first step in fighting today’s greatest piracy challenges, such as the illegal re-distribution of live sports. NexGuard is honored to be working with Ericsson to provide a solution that is pre-integrated with today’s TV & Media industry workflows. Network ID offers a clear indication of the sources of piracy, so that rights holders can focus their anti-piracy efforts where it matters.”

Whoever buys Ericsson’s Media division is now likely to find itself tied to both Android set tops and Nagra, which makes you wonder if Nagra’s parent Kudelski might even consider raising the money to buy all those captive Ericsson clients itself, and acquire the Ericsson media business. Today Kudelski is valued at $680 million, and has declared that it wants to attack the US market in order to do more business in dollars, rather than the overly strong Swiss Franc. Buying Ericsson media would achieve that overnight and quadruple its size. Just a thought.

Last week Ericsson also signed a global metadata distribution agreement with movie resource website IMDb to allow metadata from IMDb, including ratings and rankings, to be integrated into Ericsson’s content discovery ecosystem. Interestingly it does not use one of the accepted content discovery (recommendation) systems, but has an in-house system written by Akuzi engineers. The IMDb deal will also have cost Ericsson next to nothing, and all seems to be part of a campaign to keep the business in the new without spending unduly large amounts.

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